The bitcoin falls to $9,000 on Bitmex

Bitcoin temporarily fell below $9,000 on the night of March 18 to 19 at Bitmex.

Brief Collapse of Bitcoin on Bitmex

Bitcoin briefly plunged 86% on Bitmex. It took only a few hundred bitcoin sales to overwhelm this exchange registered in the Seychelles.

Such a drop is indicative of a thinly traded order book. According to coinglass, there are only 12,700 BTC at Bitmex. This is much less than Binance, Bitfinex, or Coinbase, which respectively hold 543,000, 375,000, and 344,000 bitcoins.

Here is the Bitcoin price evolution at Bitmex last night:

#Bitcoin wicked to $8,800 on Bitmex overnight.

I remember getting filled on one of those wicks in 2020. Didn't think we'd see them again this cycle.

Good times. pic.twitter.com/sVO1iRx6BZ

— Jelle (@CryptoJelleNL) March 19, 2024

“Someone just sold 400 bitcoins in 2 hours in bursts of 10 to 50 BTC on the BTC/USDT pair on Bitmex, taking a spread of 30%. They must have lost at least 4 million dollars,” said @syq on X.

Put another way, someone probably placed a significant sell order at the spot price before closing their computer. In the absence of depth in the order book, sell orders may have been automatically triggered at extremely low levels. Hence the multimillion-dollar loss.

Indeed, the total volume of these sell orders below the true market price represented almost 1,000 bitcoins. One order was filled as low as $8,900.

BitMEX has temporarily blocked withdrawals from the accounts involved in these price movements and is currently conducting an investigation:

“This morning’s BTC sell orders were simply too significant and too frequent for independent market makers and other traders to respond to. As usual, our compliance team is investigating the accounts and transactions that triggered this price movement.

In the meantime, for clarity, our trading platform continues to operate normally. All transactions are proceeding without a hitch and all funds are secure. Deposits and withdrawals are being processed as usual, often in a matter of minutes.”

Bitmex’s reputation will take another hit. It is scandalous that such market aberrations continue to occur on this exchange which has been in existence for a decade now.